Business loan vs. line of credit

Discussion in 'Business Operations' started by POPO4995, Jan 4, 2013.

  1. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    You may be able to do a line of credit or business loan. Tell them your going to pay the truck off with the money and they can use it as collateral
  2. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,857

    You need to marry the life of the asset financed to the life of the financing. Short term LOC is for short term needs (not long livec assets) ie payroll, COGS, inventory. You almost always have to zero your LOC each year and that would be tough to do if you neef long term financing for a truck for example. If you qualify for a revolver (i dont btw), this whole post is moot but then.
  3. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    I got a SBA LOC just as you say for the lean months, like now LOL! I'll pay it back by mid season though. It took me 6 months to get it approved the SBA is VERY SLOW!
  4. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    We utilize a LOC as well, I keep my vehicle loans and large equipment loans seperate simply because these have a much lower interest rate than a line of credit. From what my loan manager told me is that if you default it is much easier for them to reposes your vehicle on a auto loan than it is for them to seize a vehicle used as collateral on a LOC. Seizing collateral is more like a forclosure process and not as quick and simple as a repo. Thus they charge a higher interest rate.

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